Germany Cuts Natural Gas Tax To Benefit Consumers

Germany will temporarily lower taxes on natural gas to ease the pressures on people struggling with soaring energy costs fueled by Russia’s war on Ukraine, German Chancellor Olaf Scholz said Thursday, the Associated Press (AP) reported.

Photo Insert: A gas station in Germany

The announcement at a hastily convened news conference in Berlin comes a day after Scholz met with hostile protests during a town hall event outside the capital. Scholz said his government had decided to lower the value-added tax on gas from 19% to 7% until the end of March 2024.

“The rising gas prices are a big burden for many citizens,” Scholz said, adding that further measures would be announced in the coming weeks.

In addition to rising wholesale prices for natural gas caused by Russia’s invasion of Ukraine earlier this year, German consumers will have to pay a new surcharge to prop up energy companies scrambling to find new supplies on the global market.

Russia has reduced flows of natural gas — used to generate electricity, run factories, and heat homes in the winter — to Germany and other European countries, and there are fears of more cutbacks as the weather gets colder and demand increases.

Scholz said lowering the tax on gas purchases in general would more than make up for the new surcharges, effectively meaning that they will be paid for from government coffers.

The German leader said the issue was a matter of “justice ... to ensure that the country remains united during this crisis.”

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